From the struggles of tobacco sales in Canada to mushrooming costs to replace underground storage tanks in Florida, Bouchard sees opportunity for Couche-Tard to grow its footprint.
"In Ontario and Quebec, over 50% of [image-nocss] tobacco smoked is contraband. This, and the anti-display legislation, have placed a huge burden on legitimate retailers and especially the small mom-and-pop convenience stores," he stated. "As a result, convenience stores are currently failing at the rate of one and a half per day in Ontario and one per day in Quebec. In both provinces, we are seeing market-share growth as a result."
He added, "Florida has a different pressure point. Thousands of gas stations, many attached to convenience stores, will have failed to comply with legislation to reinforce in-ground fuel tankscosting $250,000-$400,000 per sitewhen the deadline arrives at the end of this year. Regulators show no signs of an extension, leaving under-capitalized operators few options."
While both instances open opportunities for acquisition-hungry Couche-Tard to grow, Bouchard said these cases are only the tip of a much larger iceberg.
"This is small compared to the fall-out to be expected from the economic downturn," he stated. "Site selling prices have become more realistic in the last year, and the pool of opportunity gets ever wider. There is no doubt in my mind that we will find attractive options turning up within the criteria we have set."
Bouchard's comments about future growth cap an ebullient letter to shareholders, in which he outlines the successes of the past year, including purchasing the U.S. rights for the On the Run trademark from ExxonMobil, boosting the company's foodservice offering and even battling credit-card interchange fees.
"We are taking a lead position on this [credit-card] issue," Bouchard stated. "I'm not a person who normally seeks out regulation, but fees here are four times those in Australia, where sensible controls have been set. We have met with the ministers of Finance and Industry here in Canada and there are motions now in front of the U.S. Congress and the Senate where we have bipartisan support. I hope to have news in the near future."
Couche-Tard's year ended April 26 with the strongest net earnings in the company's history. At $253.9 million, earnings were up 34.1% over fiscal 2008.
The strong results meant lucrative paydays for several Couche-Tard executives. While top executives and the Board of Directors took a 10% pay cut earlier this year to show support for the company and its employees during the economic downturn, compensation of the top five executives totaled $5.56 million in 2009, compared to $3.01 million a year ago, excluding stock options and pension income. Bouchard's salary plus bonus for the fiscal year totaled $2.47 million, compared to $1.21 million from fiscal 2008, according to reports filed with the Securities and Exchange Commission.
Laval, Quebec-based Alimentation Couche-Tard Inc. is the second-largest independent convenience-store operator in terms of number of stores. Couche-Tard currently has a network of 5,443 convenience stores, 3,646 of which include motor fuel dispensing, located in 11 geographic markets, including eight in the United States covering 34 states and three in Canada covering 10 provinces.
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